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Amend Tax Return 2011

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Amend Tax Return 2011

Amend tax return 2011 3. Amend tax return 2011   Section 501(c)(3) Organizations Table of Contents IntroductionChild care organizations. Amend tax return 2011 Topics - This chapter discusses: Useful Items - You may want to see: Contributions to 501(c)(3) OrganizationsCertain annuity contracts. Amend tax return 2011 Certain contracts held by a charitable remainder trust. Amend tax return 2011 Excise Taxes. Amend tax return 2011 Indoor tanning services. Amend tax return 2011 Application for Recognition of ExemptionPolitical activity. Amend tax return 2011 Private delivery service. Amend tax return 2011 Amendments to organizing documents required. Amend tax return 2011 How to show reasonable action and good faith. Amend tax return 2011 Not acting reasonably and in good faith. Amend tax return 2011 Prejudicing the interest of the Government. Amend tax return 2011 Procedure for requesting extension. Amend tax return 2011 More information. Amend tax return 2011 Organizations Not Required To File Form 1023 Articles of OrganizationOrganizational Test Dedication and Distribution of Assets Educational Organizations and Private SchoolsEducational Organizations Private Schools Organizations Providing InsuranceCharitable Risk Pools Other Section 501(c)(3) OrganizationsCharitable Organizations Religious Organizations Scientific Organizations Literary Organizations Amateur Athletic Organizations Prevention of Cruelty to Children or Animals Private Foundations and Public CharitiesPrivate Foundations Public Charities Private Operating Foundations Lobbying ExpendituresLobbying expenditures. Amend tax return 2011 Grass roots expenditures. Amend tax return 2011 Lobbying nontaxable amount. Amend tax return 2011 Grass roots nontaxable amount. Amend tax return 2011 Organization that no longer qualifies. Amend tax return 2011 Tax on organization. Amend tax return 2011 Tax on managers. Amend tax return 2011 Taxes on organizations. Amend tax return 2011 Taxes on managers. Amend tax return 2011 Political expenditures. Amend tax return 2011 Correction of expenditure. Amend tax return 2011 Introduction An organization may qualify for exemption from federal income tax if it is organized and operated exclusively for one or more of the following purposes. Amend tax return 2011 Religious. Amend tax return 2011 Charitable. Amend tax return 2011 Scientific. Amend tax return 2011 Testing for public safety. Amend tax return 2011 Literary. Amend tax return 2011 Educational. Amend tax return 2011 Fostering national or international amateur sports competition (but only if none of its activities involve providing athletic facilities or equipment; however, see Amateur Athletic Organizations , later in this chapter). Amend tax return 2011 The prevention of cruelty to children or animals. Amend tax return 2011 To qualify, the organization must be a corporation, community chest, fund, articles of association, or foundation. Amend tax return 2011 A trust is a fund or foundation and will qualify. Amend tax return 2011 However, an individual or a partnership will not qualify. Amend tax return 2011 Examples. Amend tax return 2011   Qualifying organizations include: Nonprofit old-age homes, Parent-teacher associations, Charitable hospitals or other charitable organizations, Alumni associations, Schools, Chapters of the Red Cross, Boys' or Girls' Clubs, and Churches. Amend tax return 2011 Child care organizations. Amend tax return 2011   The term educational purposes includes providing for care of children away from their homes if substantially all the care provided is to enable individuals (the parents) to be gainfully employed and the services are available to the general public. Amend tax return 2011 Instrumentalities. Amend tax return 2011   A state or municipal instrumentality may qualify under section 501(c)(3) if it is organized as a separate entity from the governmental unit that created it and if it otherwise meets the organizational and operational tests of section 501(c)(3). Amend tax return 2011 Examples of a qualifying instrumentality might include state schools, universities, or hospitals. Amend tax return 2011 However, if an organization is an integral part of the local government or possesses governmental powers, it does not qualify for exemption. Amend tax return 2011 A state or municipality itself does not qualify for exemption. Amend tax return 2011 Topics - This chapter discusses: Contributions to 501(c)(3) organizations, Applications for recognition of exemption, Articles of Organization, Educational organizations and private schools, Organizations providing insurance, Other section 501(c)(3) organizations, Private foundations and public charities, and Lobbying expenditures. Amend tax return 2011 Useful Items - You may want to see: Forms (and Instructions) 1023 Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code See chapter 6 for information about getting publications and forms. Amend tax return 2011 Contributions to 501(c)(3) Organizations Contributions to domestic organizations described in this chapter, except organizations testing for public safety, are deductible as charitable contributions on the donor's federal income tax return. Amend tax return 2011 Fundraising events. Amend tax return 2011   If the donor receives something of value in return for the contribution, a common occurrence with fundraising efforts, part or all of the contribution may not be deductible. Amend tax return 2011 This may apply to fundraising activities such as charity balls, bazaars, banquets, auctions, concerts, athletic events, and solicitations for membership or contributions when merchandise or benefits are given in return for payment of a specified minimum contribution. Amend tax return 2011   If the donor receives or expects to receive goods or services in return for a contribution to your organization, the donor cannot deduct any part of the contribution unless the donor intends to, and does, make a payment greater than the fair market value of the goods or services. Amend tax return 2011 If a deduction is allowed, the donor can deduct only the part of the contribution, if any, that is more than the fair market value of the goods or services received. Amend tax return 2011 You should determine in advance the fair market value of any goods or services to be given to contributors and tell them, when you publicize the fundraising event or solicit their contributions, how much is deductible and how much is for the goods or services. Amend tax return 2011 See Disclosure of Quid Pro Quo Contributions in chapter 2. Amend tax return 2011 Exemption application not filed. Amend tax return 2011   Donors cannot deduct any charitable contribution to an organization that is required to apply for recognition of exemption but has not done so. Amend tax return 2011 Separate fund—contributions that are deductible. Amend tax return 2011   An organization that is exempt from federal income tax other than as an organization described in section 501(c)(3) can, if it desires, establish a fund, separate and apart from its other funds, exclusively for religious, charitable, scientific, literary, or educational purposes, fostering national or international amateur sports competition, or for the prevention of cruelty to children or animals. Amend tax return 2011   If the fund is organized and operated exclusively for these purposes, it may qualify for exemption as an organization described in section 501(c)(3), and contributions made to it will be deductible as provided by section 170. Amend tax return 2011 A fund with these characteristics must be organized in such a manner as to prohibit the use of its funds upon dissolution, or otherwise, for the general purposes of the organization creating it. Amend tax return 2011 Personal benefit contracts. Amend tax return 2011   Generally, charitable deductions will not be allowed for a transfer to, or for the use of, a section 501(c)(3) or (c)(4) organization if in connection with the transfer: The organization directly or indirectly pays, or previously paid, a premium on a personal benefit contract for the transferor, or There is an understanding or expectation that anyone will directly or indirectly pay a premium on a personal benefit contract for the transferor. Amend tax return 2011   A personal benefit contract with respect to the transferor is any life insurance, annuity, or endowment contract, if any direct or indirect beneficiary under the contract is the transferor, any member of the transferor's family, or any other person designated by the transferor. Amend tax return 2011 Certain annuity contracts. Amend tax return 2011   If an organization incurs an obligation to pay a charitable gift annuity, and the organization purchases an annuity contract to fund the obligation, individuals receiving payments under the charitable gift annuity will not be treated as indirect beneficiaries if the organization owns all of the incidents of ownership under the contract, is entitled to all payments under the contract, and the timing and amount of the payments are substantially the same as the timing and amount of payments to each person under the obligation (as such obligation is in effect at the time of the transfer). Amend tax return 2011 Certain contracts held by a charitable remainder trust. Amend tax return 2011   An individual will not be considered an indirect beneficiary under a life insurance, annuity, or endowment contract held by a charitable remainder annuity trust or a charitable remainder unitrust solely by reason of being entitled to the payment if the trust owns all of the incidents of ownership under the contract, and the trust is entitled to all payments under the contract. Amend tax return 2011 Excise tax. Amend tax return 2011   If the premiums are paid in connection with a transfer for which a deduction is not allowable under the deduction denial rule, without regard to when the transfer to the charitable organization was made, an excise tax will be applied that is equal to the amount of the premiums paid by the organization on any life insurance, annuity, or endowment contract. Amend tax return 2011 The excise tax does not apply if all of the direct and indirect beneficiaries under the contract are organizations. Amend tax return 2011 Excise Taxes. Amend tax return 2011   A charitable organization liable for excise taxes must file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code. Amend tax return 2011 Generally, the due date for filing Form 4720 occurs on the fifteenth day of the fifth month following the close of the organization's tax year. Amend tax return 2011 Indoor tanning services. Amend tax return 2011   If your organization provides an indoor tanning bed service, the ACA imposed a 10% excise tax on services provided after June 30, 2010. Amend tax return 2011 For more information, go to IRS. Amend tax return 2011 gov and select Affordable Care Act Tax Provisions. Amend tax return 2011 Application for Recognition of Exemption This discussion describes certain information to be provided upon application for recognition of exemption by all organizations created for any of the purposes described earlier in this chapter. Amend tax return 2011 For example, the application must include a conformed copy of the organization's articles of incorporation, as discussed under Articles of Organization , later in this chapter. Amend tax return 2011 See the organization headings that follow for specific information your organization may need to provide. Amend tax return 2011 Form 1023. Amend tax return 2011   Your organization must file its application for recognition of exemption on Form 1023. Amend tax return 2011 See chapter 1 and the instructions accompanying Form 1023 for the procedures to follow in applying. Amend tax return 2011 Some organizations are not required to file Form 1023. Amend tax return 2011 See Organizations Not Required To File Form 1023, later. Amend tax return 2011    Additional information to help you complete your application can be found online. Amend tax return 2011 Go to Exemption Requirement – Section 501(c)(3) Organizations and select the link at the bottom of the Web page for step by step help with the application process. Amend tax return 2011 See Exemption Requirements - Section 501(c)(3) Organizations. Amend tax return 2011   Form 1023 and accompanying statements must show that all of the following are true. Amend tax return 2011 The organization is organized exclusively for, and will be operated exclusively for, one or more of the purposes (religious, charitable, etc. Amend tax return 2011 ) specified in the introduction to this chapter. Amend tax return 2011 No part of the organization's net earnings will inure to the benefit of private shareholders or individuals. Amend tax return 2011 You must establish that your organization will not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. Amend tax return 2011 The organization will not, as a substantial part of its activities, attempt to influence legislation (unless it elects to come under the provisions allowing certain lobbying expenditures) or participate to any extent in a political campaign for or against any candidate for public office. Amend tax return 2011 See Political activity, next, and Lobbying Expenditures , near the end of this chapter. Amend tax return 2011 Political activity. Amend tax return 2011   If any of the activities (whether or not substantial) of your organization consist of participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office, your organization will not qualify for tax-exempt status under section 501(c)(3). Amend tax return 2011 Such participation or intervention includes the publishing or distributing of statements. Amend tax return 2011   Whether your organization is participating or intervening, directly or indirectly, in any political campaign on behalf of (or in opposition to) any candidate for public office depends upon all of the facts and circumstances of each case. Amend tax return 2011 Certain voter education activities or public forums conducted in a nonpartisan manner may not be prohibited political activity under section 501(c)(3), while other so-called voter education activities may be prohibited. Amend tax return 2011 Effective date of exemption. Amend tax return 2011   Most organizations described in this chapter that were organized after October 9, 1969, will not be treated as tax exempt unless they apply for recognition of exemption by filing Form 1023. Amend tax return 2011 These organizations will not be treated as tax exempt for any period before they file Form 1023, unless they file the form within 27 months from the end of the month in which they were organized. Amend tax return 2011 If the organization files the application within this 27-month period, the organization's exemption will be recognized retroactively to the date it was organized. Amend tax return 2011 Otherwise, exemption will be recognized only from the date of receipt. Amend tax return 2011 The date of receipt is the date of the U. Amend tax return 2011 S. Amend tax return 2011 postmark on the cover in which an exemption application is mailed or, if no postmark appears on the cover, the date the application is stamped as received by the IRS. Amend tax return 2011 Private delivery service. Amend tax return 2011   If a private delivery service designated by the IRS, rather than the U. Amend tax return 2011 S. Amend tax return 2011 Postal Service, is used to deliver the application, the date of receipt is the date recorded or marked by the private delivery service. Amend tax return 2011 The following private delivery services have been designated by the IRS. Amend tax return 2011 DHL Express (DHL): DHL “Same Day” Service. Amend tax return 2011 Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. Amend tax return 2011 United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Amend tax return 2011 M. Amend tax return 2011 , UPS Worldwide Express Plus, and UPS Worldwide Express. Amend tax return 2011 Amendments to organizing documents required. Amend tax return 2011   If an organization is required to alter its activities or to make substantive amendments to its organizing document, the ruling or determination letter recognizing its exempt status will be effective as of the date the changes are made. Amend tax return 2011 If only a nonsubstantive amendment is made, exempt status will be effective as of the date it was organized, if the application was filed within the 15-month period, or the date the application was filed. Amend tax return 2011 Extensions of time for filing. Amend tax return 2011   There are two ways organizations seeking exemption can receive an extension of time for filing Form 1023. Amend tax return 2011 Automatic 12-month extension. Amend tax return 2011 Organizations will receive an automatic 12-month extension if they file an application for recognition of exemption with the IRS within 12 months of the original deadline. Amend tax return 2011 To get this extension, an organization must add the following statement at the top of its application: “Filed Pursuant to Section 301. Amend tax return 2011 9100-2. Amend tax return 2011 ” Discretionary extensions. Amend tax return 2011 An organization that fails to file a Form 1023 within the extended 12-month period will be granted an extension to file if it submits evidence (including affidavits) to establish that: It acted reasonably and in good faith, and Granting a discretionary extension will not prejudice the interests of the government. Amend tax return 2011 How to show reasonable action and good faith. Amend tax return 2011   An organization acted reasonably and showed good faith if at least one of the following is true. Amend tax return 2011 The organization requests relief before its failure to file is discovered by the IRS. Amend tax return 2011 The organization failed to file because of intervening events beyond its control. Amend tax return 2011 The organization exercised reasonable diligence (taking into account the complexity of the return or issue and the organization's experience in these matters) but was not aware of the filing requirement. Amend tax return 2011 The organization reasonably relied upon the written advice of the IRS. Amend tax return 2011 The organization reasonably relied upon the advice of a qualified tax professional who failed to file or advise the organization to file Form 1023. Amend tax return 2011 An organization cannot rely on the advice of a tax professional if it knows or should know that he or she is not competent to render advice on filing exemption applications or is not aware of all the relevant facts. Amend tax return 2011 Not acting reasonably and in good faith. Amend tax return 2011   An organization has not acted reasonably and in good faith under the following circumstances. Amend tax return 2011 It seeks to change a return position for which an accuracy-related penalty has been or could be imposed at the time the relief is requested. Amend tax return 2011 It was informed of the requirement to file and related tax consequences, but chose not to file. Amend tax return 2011 It uses hindsight in requesting relief. Amend tax return 2011 The IRS will not ordinarily grant an extension if specific facts have changed since the due date that makes filing an application advantageous to an organization. Amend tax return 2011 Prejudicing the interest of the Government. Amend tax return 2011   Prejudice to the interest of the Government results if granting an extension of time to file to an organization results in a lower total tax liability for the years to which the filing applies than would have been the case if the organization had filed on time. Amend tax return 2011 Before granting an extension, the IRS can require the organization requesting it to submit a statement from an independent auditor certifying that no prejudice will result if the extension is granted. Amend tax return 2011 The interests of the Government are ordinarily prejudiced if the tax year in which the application should have been filed (or any tax year that would have been affected had the filing been timely) are closed by the statute of limitations before relief is granted. Amend tax return 2011 The IRS can condition a grant of relief on the organization providing the IRS with a statement from an independent auditor certifying that the interests of the Government are not prejudiced. Amend tax return 2011 Procedure for requesting extension. Amend tax return 2011   To request a discretionary extension, an organization must submit (to the IRS address shown on Form 1023 and Notice 1382) the following. Amend tax return 2011 A statement showing the date Form 1023 was required to have been filed and the date it was actually filed. Amend tax return 2011 Any documents relevant to the application. Amend tax return 2011 An affidavit describing in detail the events that led to the failure to apply and to the discovery of that failure. Amend tax return 2011 If the organization relied on a tax professional's advice, the affidavit must describe the engagement and responsibilities of the professional and the extent to which the organization relied on him or her. Amend tax return 2011 This affidavit must be accompanied by a dated declaration, signed by an individual who has personal knowledge of the facts and circumstances, who is authorized to act for the organization, which states, “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. Amend tax return 2011 ” Detailed affidavits from individuals having knowledge or information about the events that led to the failure to make the application and to the discovery of that failure. Amend tax return 2011 This includes the organization's return preparer, and any accountant or attorney, knowledgeable in tax matters, who advised the taxpayer on the application. Amend tax return 2011 The affidavits must describe the engagement and responsibilities of the individual and the advice that he or she provided. Amend tax return 2011 These affidavits must include the name, current address, and taxpayer identification number of the individual, and be accompanied by a dated declaration, signed by the individual, which states: “Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request, and such facts are true, correct, and complete. Amend tax return 2011 ” The organization must state whether the returns for the tax year in which the application should have been filed or any tax years that would have been affected by the application had it been timely made are being examined by the IRS, an appeals office, or a federal court. Amend tax return 2011 The organization must notify the IRS office considering the request for relief if the IRS starts an examination of any such return while the organization's request for relief is pending. Amend tax return 2011 The organization, if requested, has to submit copies of its tax returns, and copies of the returns of other affected taxpayers. Amend tax return 2011   A request for this relief in connection with an application for exemption does not require payment of an additional user fee. Amend tax return 2011 Also, a request for relief under the automatic 12-month extension does not require payment of a user fee. Amend tax return 2011 More information. Amend tax return 2011   For more information about these procedures, see Regulations sections 301. Amend tax return 2011 9100-1, 301. Amend tax return 2011 9100-2, 301. Amend tax return 2011 9100-3, Revenue Procedure 2013-4, section 6. Amend tax return 2011 04, 2013-1 I. Amend tax return 2011 R. Amend tax return 2011 B. Amend tax return 2011 126, and Revenue Procedure 2013-8, 2013-1 I. Amend tax return 2011 R. Amend tax return 2011 B. Amend tax return 2011 237. Amend tax return 2011 See Revenue Procedure 2013-4 and Revenue Procedure 2013-8. Amend tax return 2011 Notification from the IRS. Amend tax return 2011   Organizations filing Form 1023 and satisfying all requirements of section 501(c)(3) will be notified of their exempt status in writing. Amend tax return 2011 Organizations Not Required To File Form 1023 Some organizations are not required to file Form 1023. Amend tax return 2011 These include: Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men's or women's organization, religious school, mission society, or youth group. Amend tax return 2011 Any organization (other than a private foundation) normally having annual gross receipts of not more than $5,000 (see Gross receipts test, later). Amend tax return 2011 These organizations are exempt automatically if they meet the requirements of section 501(c)(3). Amend tax return 2011 Filing Form 1023 to establish exemption. Amend tax return 2011   If the organization wants to establish its exemption with the IRS and receive a ruling or determination letter recognizing its exempt status, it should file Form 1023. Amend tax return 2011 By establishing its exemption, potential contributors are assured by the IRS that contributions will be deductible. Amend tax return 2011 A subordinate organization (other than a private foundation) covered by a group exemption letter does not have to submit a Form 1023 for itself. Amend tax return 2011 Private foundations. Amend tax return 2011   See Private Foundations and Public Charities, later in this chapter, for more information about the additional notice required from an organization in order for it not to be presumed to be a private foundation and for the additional information required from a private foundation claiming to be an operating foundation. Amend tax return 2011 Gross receipts test. Amend tax return 2011   For purposes of the gross receipts test, an organization normally does not have more than $5,000 annually in gross receipts if: During its first tax year the organization received gross receipts of $7,500 or less, During its first 2 years the organization had a total of $12,000 or less in gross receipts, and In the case of an organization that has been in existence for at least 3 years, the total gross receipts received by the organization during the immediately preceding 2 years, plus the current year, are $15,000 or less. Amend tax return 2011   An organization with gross receipts more than the amounts in the gross receipts test, unless otherwise exempt from filing Form 1023, must file a Form 1023 within 90 days after the end of the period in which the amounts are exceeded. Amend tax return 2011 For example, an organization's gross receipts for its first tax year were less than $7,500, but at the end of its second tax year its gross receipts for the 2-year period were more than $12,000. Amend tax return 2011 The organization must file Form 1023 within 90 days after the end of its second tax year. Amend tax return 2011   If the organization had existed for at least 3 tax years and had met the gross receipts test for all prior tax years but fails to meet the requirement for the current tax year, its tax-exempt status for the prior years will not be lost even if Form 1023 is not filed within 90 days after the close of the current tax year. Amend tax return 2011 However, the organization will not be treated as a section 501(c)(3) organization for the period beginning with the current tax year and ending with the filing of Form 1023. Amend tax return 2011 Example. Amend tax return 2011   An organization is organized and operated exclusively for charitable purposes and is not a private foundation. Amend tax return 2011 It was incorporated on January 1, 2009, and files returns on a calendar-year basis. Amend tax return 2011 It did not file a Form 1023. Amend tax return 2011 The organization's gross receipts during the years 2009 through 2012 were as follows: 2009 $3,600 2010 2,900 2011 400 2012 12,600   The organization's total gross receipts for 2009, 2010, and 2011 were $6,900. Amend tax return 2011 Therefore, it did not have to file Form 1023 and is exempt for those years. Amend tax return 2011 However, for 2010, 2011, and 2012 the total gross receipts were $15,900. Amend tax return 2011 Therefore, the organization must file Form 1023 within 90 days after the end of its 2012 tax year. Amend tax return 2011 If it does not file within this time period, it will not be exempt under section 501(c)(3) for the period beginning with tax year 2012 ending when the Form 1023 is received by the IRS. Amend tax return 2011 The organization, however, will not lose its exempt status for the tax years ending before January 1, 2012. Amend tax return 2011   The IRS will consider applying the Commissioner's discretionary authority to extend the time for filing Form 1023. Amend tax return 2011 See the procedures for this extension discussed earlier. Amend tax return 2011 Articles of Organization Your organization must include a conformed copy of its articles of organization with the application for recognition of exemption. Amend tax return 2011 This may be its trust instrument, corporate charter, articles of association, or any other written instrument by which it is created. Amend tax return 2011 Organizational Test The articles of organization must limit the organization's purposes to one or more of those described at the beginning of this chapter and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that do not further one or more of those purposes. Amend tax return 2011 These conditions for exemption are referred to as the organizational test. Amend tax return 2011 Section 501(c)(3) is the provision of law that grants exemption to the organizations described in this chapter. Amend tax return 2011 Therefore, the organizational test may be met if the purposes stated in the articles of organization are limited in some way by reference to section 501(c)(3). Amend tax return 2011 The requirement that your organization's purposes and powers must be limited by the articles of organization is not satisfied if the limit is contained only in the bylaws or other rules or regulations. Amend tax return 2011 Moreover, the organizational test is not satisfied by statements of your organization's officers that you intend to operate only for exempt purposes. Amend tax return 2011 Also, the test is not satisfied by the fact that your actual operations are for exempt purposes. Amend tax return 2011 In interpreting an organization's articles, the law of the state where the organization was created is controlling. Amend tax return 2011 If an organization contends that the terms of its articles have a different meaning under state law than their generally accepted meaning, such meaning must be established by a clear and convincing reference to relevant court decisions, opinions of the state attorney general, or other appropriate state authorities. Amend tax return 2011 The following are examples illustrating the organizational test. Amend tax return 2011 Example 1. Amend tax return 2011 Articles of organization state that an organization is formed exclusively for literary and scientific purposes within the meaning of section 501(c)(3). Amend tax return 2011 These articles appropriately limit the organization's purposes. Amend tax return 2011 The organization meets the organizational test. Amend tax return 2011 Example 2. Amend tax return 2011 An organization, by the terms of its articles, is formed to engage in research without any further description or limitation. Amend tax return 2011 The organization will not be properly limited as to its purposes since all research is not scientific. Amend tax return 2011 The organization does not meet the organizational test. Amend tax return 2011 Example 3. Amend tax return 2011 An organization's articles state that its purpose is to receive contributions and pay them over to organizations that are described in section 501(c)(3) and exempt from taxation under section 501(a). Amend tax return 2011 The organization meets the organizational test. Amend tax return 2011 Example 4. Amend tax return 2011 If a stated purpose in the articles is the conduct of a school of adult education and its manner of operation is described in detail, such a purpose will be satisfactorily limited. Amend tax return 2011 Example 5. Amend tax return 2011 If the articles state the organization is formed for charitable purposes, without any further description, such language ordinarily will be sufficient since the term charitable has a generally accepted legal meaning. Amend tax return 2011 On the other hand, if the purposes are stated to be charitable, philanthropic, and benevolent, the organizational requirement will not be met since the terms philanthropic and benevolent have no generally accepted legal meaning and, therefore, the stated purposes may, under the laws of the state, permit activities that are broader than those intended by the exemption law. Amend tax return 2011 Example 6. Amend tax return 2011 If the articles state an organization is formed to promote American ideals, or to foster the best interests of the people, or to further the common welfare and well-being of the community, without any limitation or provision restricting such purposes to accomplishment only in a charitable manner, the purposes will not be sufficiently limited. Amend tax return 2011 Such purposes are vague and may be accomplished other than in an exempt manner. Amend tax return 2011 Example 7. Amend tax return 2011 A stated purpose to operate a hospital does not meet the organizational test since it is not necessarily charitable. Amend tax return 2011 A hospital may or may not be exempt depending on the manner in which it is operated. Amend tax return 2011 Example 8. Amend tax return 2011 An organization that is expressly empowered by its articles to carry on social activities will not be sufficiently limited as to its power, even if its articles state that it is organized and will be operated exclusively for charitable purposes. Amend tax return 2011 Dedication and Distribution of Assets Assets of an organization must be permanently dedicated to an exempt purpose. Amend tax return 2011 This means that should an organization dissolve, its assets must be distributed for an exempt purpose described in this chapter, or to the Federal Government or to a state or local government for a public purpose. Amend tax return 2011 If the assets could be distributed to members or private individuals or for any other purpose, the organizational test is not met. Amend tax return 2011 Dedication. Amend tax return 2011   To establish that your organization's assets will be permanently dedicated to an exempt purpose, the articles of organization should contain a provision ensuring their distribution for an exempt purpose in the event of dissolution. Amend tax return 2011 Although reliance can be placed upon state law to establish permanent dedication of assets for exempt purposes, your organization's application probably can be processed much more rapidly if its articles of organization include a provision ensuring permanent dedication of assets for exempt purposes. Amend tax return 2011 Distribution. Amend tax return 2011   Revenue Procedure 82-2, 1982-1 C. Amend tax return 2011 B. Amend tax return 2011 367, identifies the states and circumstances in which the IRS will not require an express provision for the distribution of assets upon dissolution in the articles of organization. Amend tax return 2011 The procedure also provides a sample of an acceptable dissolution provision for organizations required to have one. Amend tax return 2011   If a named beneficiary is to be the distributee, it must be one that would qualify and would be exempt within the meaning of section 501(c)(3) at the time the dissolution takes place. Amend tax return 2011 Since the named beneficiary at the time of dissolution may not be qualified, may not be in existence, or may be unwilling or unable to accept the assets of the dissolving organization, a provision should be made for distribution of the assets for one or more of the purposes specified in this chapter in the event of any such contingency. Amend tax return 2011 Sample articles of organization. Amend tax return 2011   See sample articles of organization in the Appendix in the back of this publication. Amend tax return 2011 Educational Organizations and Private Schools If your organization wants to obtain recognition of exemption as an educational organization, you must submit complete information as to how your organization carries on or plans to carry on its educational activities, such as by conducting a school, by panels, discussions, lectures, forums, radio and television programs, or through various cultural media such as museums, symphony orchestras, or art exhibits. Amend tax return 2011 In each instance, you must explain by whom and where these activities are or will be conducted and the amount of admission fees, if any. Amend tax return 2011 You must submit a copy of the pertinent contracts, agreements, publications, programs, etc. Amend tax return 2011 If you are organized to conduct a school, you must submit full information regarding your tuition charges, number of faculty members, number of full-time and part-time students enrolled, courses of study and degrees conferred, together with a copy of your school catalog. Amend tax return 2011 See also Private Schools , discussed later. Amend tax return 2011 Educational Organizations The term educational relates to: The instruction or training of individuals for the purpose of improving or developing their capabilities, or The instruction of the public on subjects useful to individuals and beneficial to the community. Amend tax return 2011 Advocacy of a position. Amend tax return 2011   Advocacy of a particular position or viewpoint may be educational if there is a sufficiently full and fair exposition of pertinent facts to permit an individual or the public to form an independent opinion or conclusion. Amend tax return 2011 The mere presentation of unsupported opinion is not educational. Amend tax return 2011 Method not educational. Amend tax return 2011   The method used by an organization to develop and present its views is a factor in determining if an organization qualifies as educational within the meaning of section 501(c)(3). Amend tax return 2011 The following factors may indicate that the method is not educational. Amend tax return 2011 The presentation of viewpoints unsupported by facts is a significant part of the organization's communications. Amend tax return 2011 The facts that purport to support the viewpoint are distorted. Amend tax return 2011 The organization's presentations make substantial use of inflammatory and disparaging terms and express conclusions more on the basis of emotion than of objective evaluations. Amend tax return 2011 The approach used is not aimed at developing an understanding on the part of the audience because it does not consider their background or training. Amend tax return 2011   Exceptional circumstances, however, may exist where an organization's advocacy may be educational even if one or more of the factors listed above are present. Amend tax return 2011 Qualifying organizations. Amend tax return 2011   The following types of organizations may qualify as educational: An organization, such as a primary or secondary school, a college, or a professional or trade school, that has a regularly scheduled curriculum, a regular faculty, and a regularly enrolled student body in attendance at a place where the educational activities are regularly carried on, An organization whose activities consist of conducting public discussion groups, forums, panels, lectures, or other similar programs, An organization that presents a course of instruction by correspondence or through the use of television or radio, A museum, zoo, planetarium, symphony orchestra, or other similar organization, A nonprofit children's day-care center, and A credit counseling organization. Amend tax return 2011 College book stores, cafeterias, restaurants, etc. Amend tax return 2011   These and other on-campus organizations should submit information to show that they are controlled by and operated for the convenience of the faculty and student body or by whom they are controlled and whom they serve. Amend tax return 2011 Alumni association. Amend tax return 2011   An alumni association should establish that it is organized to promote the welfare of the university with which it is affiliated, is subject to the control of the university as to its policies and destination of funds, and is operated as an integral part of the university or is otherwise organized to promote the welfare of the college or university. Amend tax return 2011 If your association does not have these characteristics, it may still be exempt as a social club if it meets the requirements described in chapter 4, under 501(c)(7) - Social and Recreation Clubs . Amend tax return 2011 Athletic organization. Amend tax return 2011   This type of organization must submit evidence that it is engaged in activities such as directing and controlling interscholastic athletic competitions, conducting tournaments, and prescribing eligibility rules for contestants. Amend tax return 2011 If it is not so engaged, your organization may be exempt as a social club described in chapter 4. Amend tax return 2011 Raising funds to be used for travel and other activities to interview and persuade prospective students with outstanding athletic ability to attend a particular university does not show an exempt purpose. Amend tax return 2011 If your organization is not exempt as an educational organization, see Amateur Athletic Organizations , later in this chapter. Amend tax return 2011 Private Schools Every private school filing an application for recognition of tax-exempt status must supply the IRS (on Schedule B, Form 1023) with the following information. Amend tax return 2011 The racial composition of the student body, and of the faculty and administrative staff, as of the current academic year. Amend tax return 2011 (This information also must be projected, so far as may be feasible, for the next academic year. Amend tax return 2011 ) The amount of scholarship and loan funds, if any, awarded to students enrolled and the racial composition of students who have received the awards. Amend tax return 2011 A list of the school's incorporators, founders, board members, and donors of land or buildings, whether individuals or organizations. Amend tax return 2011 A statement indicating whether any of the organizations described in item (3) above have an objective of maintaining segregated public or private school education at the time the application is filed and, if so, whether any of the individuals described in item (3) are officers or active members of those organizations at the time the application is filed. Amend tax return 2011 The public school district and county in which the school is located. Amend tax return 2011 How to determine racial composition. Amend tax return 2011   The racial composition of the student body, faculty, and administrative staff can be an estimate based on the best information readily available to the school, without requiring student applicants, students, faculty, or administrative staff to submit to the school information that the school otherwise does not require. Amend tax return 2011 Nevertheless, a statement of the method by which the racial composition was determined must be supplied. Amend tax return 2011 The identity of individual students or members of the faculty and administrative staff should not be included with this information. Amend tax return 2011   A school that is a state or municipal instrumentality (see Instrumentalities , near the beginning of this chapter), whether or not it qualifies for exemption under section 501(c)(3), is not considered to be a private school for purposes of the following discussion. Amend tax return 2011 Racially Nondiscriminatory Policy To qualify as an organization exempt from federal income tax, a private school must include a statement in its charter, bylaws, or other governing instrument, or in a resolution of its governing body, that it has a racially nondiscriminatory policy as to students and that it does not discriminate against applicants and students on the basis of race, color, or national or ethnic origin. Amend tax return 2011 Also, the school must circulate information that clearly states the school's admission policies. Amend tax return 2011 A racially nondiscriminatory policy toward students means that the school admits the students of any race to all the rights, privileges, programs, and activities generally accorded or made available to students at that school and that the school does not discriminate on the basis of race in administering its educational policies, admission policies, scholarship and loan programs, and athletic and other school-administered programs. Amend tax return 2011 The IRS considers discrimination on the basis of race to include discrimination on the basis of color or national or ethnic origin. Amend tax return 2011 The existence of a racially discriminatory policy with respect to the employment of faculty and administrative staff is indicative of a racially discriminatory policy as to students. Amend tax return 2011 Conversely, the absence of racial discrimination in the employment of faculty and administrative staff is indicative of a racially nondiscriminatory policy as to students. Amend tax return 2011 A policy of a school that favors racial minority groups with respect to admissions, facilities and programs, and financial assistance is not discrimination on the basis of race when the purpose and effect of this policy is to promote establishing and maintaining the school's nondiscriminatory policy. Amend tax return 2011 A school that selects students on the basis of membership in a religious denomination or unit is not discriminating if membership in the denomination or unit is open to all on a racially nondiscriminatory basis. Amend tax return 2011 Policy statement. Amend tax return 2011   The school must include a statement of its racially nondiscriminatory policy in all its brochures and catalogs dealing with student admissions, programs, and scholarships. Amend tax return 2011 Also, the school must include a reference to its racially nondiscriminatory policy in other written advertising that it uses to inform prospective students of its programs. Amend tax return 2011 Publicity requirement. Amend tax return 2011   The school must make its racially nondiscriminatory policy known to all segments of the general community served by the school. Amend tax return 2011 Selective communication of a racially nondiscriminatory policy that a school provides solely to leaders of racial groups will not be considered an effective means of communication to make the policy known to all segments of the community. Amend tax return 2011 To satisfy this requirement, the school must use one of the following two methods. Amend tax return 2011 Method one. Amend tax return 2011   The school can publish a notice of its racially nondiscriminatory policy in a newspaper of general circulation that serves all racial segments of the community. Amend tax return 2011 Such publication must be repeated at least once annually during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Amend tax return 2011 When more than one community is served by a school, the school can publish the notice in those newspapers that are reasonably likely to be read by all racial segments in the communities that the school serves. Amend tax return 2011 If this method is used, the notice must meet the following printing requirements. Amend tax return 2011 It must appear in a section of the newspaper likely to be read by prospective students and their families. Amend tax return 2011 It must occupy at least 3 column inches. Amend tax return 2011 It must have its title printed in at least 12 point bold face type. Amend tax return 2011 It must have the remaining text printed in at least 8 point type. Amend tax return 2011 The following is an acceptable example of the notice:   NOTICE OF NONDISCRIMINATORY POLICY AS TO STUDENTS     The M School admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. Amend tax return 2011 It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs. Amend tax return 2011   Method two. Amend tax return 2011   The school can use the broadcast media to publicize its racially nondiscriminatory policy if this use makes the policy known to all segments of the general community the school serves. Amend tax return 2011 If the school uses this method, it must provide documentation showing that the means by which this policy was communicated to all segments of the general community was reasonably expected to be effective. Amend tax return 2011 In this case, appropriate documentation would include copies of the tapes or scripts used and records showing that there was an adequate number of announcements. Amend tax return 2011 The documentation also would include proof that these announcements were made during hours when they were likely to be communicated to all segments of the general community, that they were long enough to convey the message clearly, and that they were broadcast on radio or television stations likely to be listened to by substantial numbers of members of all racial segments of the general community. Amend tax return 2011 Announcements must be made during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Amend tax return 2011 Exceptions. Amend tax return 2011   The publicity requirements will not apply in the following situations. Amend tax return 2011 First, if for the preceding 3 years the enrollment of a parochial or other church-related school consists of students at least 75% of whom are members of the sponsoring religious denomination or unit, the school can make known its racially nondiscriminatory policy in whatever newspapers or circulars the religious denomination or unit uses in the communities from which the students are drawn. Amend tax return 2011 These newspapers and circulars can be distributed by a particular religious denomination or unit or by an association that represents a number of religious organizations of the same denomination. Amend tax return 2011 If, however, the school advertises in newspapers of general circulation in the community or communities from which its students are drawn and the second exception (discussed next) does not apply to the school, then it must comply with either of the publicity requirements explained earlier. Amend tax return 2011 Second, if a school customarily draws a substantial percentage of its students nationwide, worldwide, from a large geographic section or sections of the United States, or from local communities, and if the school follows a racially nondiscriminatory policy as to its students, the school may satisfy the publicity requirement by complying with the instructions explained earlier under Policy statement . Amend tax return 2011   The school can demonstrate that it follows a racially nondiscriminatory policy either by showing that it currently enrolls students of racial minority groups in meaningful numbers or, except for local community schools, when minority students are not enrolled in meaningful numbers, that its promotional activities and recruiting efforts in each geographic area were reasonably designed to inform students of all racial segments in the general communities within the area of the availability of the school. Amend tax return 2011 The question as to whether a school demonstrates such a policy satisfactorily will be determined on the basis of the facts and circumstances of each case. Amend tax return 2011   The IRS recognizes that the failure by a school drawing its students from local communities to enroll racial minority group students may not necessarily indicate the absence of a racially nondiscriminatory policy when there are relatively few or no such students in these communities. Amend tax return 2011 Actual enrollment is, however, a meaningful indication of a racially nondiscriminatory policy in a community in which a public school or schools became subject to a desegregation order of a federal court or are otherwise expressly obligated to implement a desegregation plan under the terms of any written contract or other commitment to which any federal agency was a party. Amend tax return 2011   The IRS encourages schools to satisfy the publicity requirement by using either of the methods described earlier, even though a school considers itself to be within one of the Exceptions. Amend tax return 2011 The IRS believes that these publicity requirements are the most effective methods to make known a school's racially nondiscriminatory policy. Amend tax return 2011 In this regard, it is each school's responsibility to determine whether either of the exceptions applies. Amend tax return 2011 Such responsibility will prepare the school, if it is audited by the IRS, to demonstrate that the failure to publish its racially nondiscriminatory policy in accordance with either one of the publicity requirements was justified by one of the exceptions. Amend tax return 2011 Also, a school must be prepared to demonstrate that it has publicly disavowed or repudiated any statements purported to have been made on its behalf (after November 6, 1975) that are contrary to its publicity of a racially nondiscriminatory policy as to students, to the extent that the school or its principal official was aware of these statements. Amend tax return 2011 Facilities and programs. Amend tax return 2011   A school must be able to show that all of its programs and facilities are operated in a racially nondiscriminatory manner. Amend tax return 2011 Scholarship and loan programs. Amend tax return 2011   As a general rule, all scholarship or other comparable benefits obtainable at the school must be offered on a racially nondiscriminatory basis. Amend tax return 2011 This must be known throughout the general community being served by the school and should be referred to in its publicity. Amend tax return 2011 Financial assistance programs, as well as scholarships and loans made under financial assistance programs, that favor members of one or more racial minority groups and that do not significantly detract from or are designed to promote a school's racially nondiscriminatory policy will not adversely affect the school's exempt status. Amend tax return 2011 Certification. Amend tax return 2011   An individual authorized to take official action on behalf of a school that claims to be racially nondiscriminatory as to students must certify annually, under penalties of perjury, on Schedule E (Form 990 or 990-EZ) or Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt From Federal Income Tax, whichever applies, that to the best of his or her knowledge and belief the school has satisfied all requirements that apply, as previously explained. Amend tax return 2011   Failure to comply with the guidelines ordinarily will result in the proposed revocation of the exempt status of a school. Amend tax return 2011 Recordkeeping requirements. Amend tax return 2011 With certain exceptions, given later, each exempt private school must maintain the following records for a minimum period of 3 years, beginning with the year after the year of compilation or acquisition. Amend tax return 2011 Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year. Amend tax return 2011 Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis. Amend tax return 2011 Copies of all materials used by or on behalf of the school to solicit contributions. Amend tax return 2011 Copies of all brochures, catalogs, and advertising dealing with student admissions, programs, and scholarships. Amend tax return 2011 (Schools advertising nationally or in a large geographic segment or segments of the United States need only maintain a record sufficient to indicate when and in what publications their advertisements were placed. Amend tax return 2011 ) The racial composition of the student body, faculty, and administrative staff can be determined in the same manner as that described at the beginning of this section. Amend tax return 2011 However, a school cannot discontinue maintaining a system of records that reflect the racial composition of its students, faculty, and administrative staff used on November 6, 1975, unless it substitutes a different system that compiles substantially the same information, without advance approval of the IRS. Amend tax return 2011 The IRS does not require that a school release any personally identifiable records or personal information except in accordance with the requirements of the Family Educational Rights and Privacy Act of 1974. Amend tax return 2011 Similarly, the IRS does not require a school to keep records prohibited under state or federal law. Amend tax return 2011 Exceptions. Amend tax return 2011   The school does not have to independently maintain these records for IRS use if both of the following are true. Amend tax return 2011 Substantially the same information has been included in a report or reports filed with an agency or agencies of federal, state, or local governments, and this information is current within 1 year. Amend tax return 2011 The school maintains copies of these reports from which this information is readily obtainable. Amend tax return 2011 If these reports do not include all of the information required, as discussed earlier, records providing such remaining information must be maintained by the school for IRS use. Amend tax return 2011 Failure to maintain records. Amend tax return 2011   Failure to maintain or to produce the required records and information, upon proper request, will create a presumption that the organization has failed to comply with these guidelines. Amend tax return 2011 Organizations Providing Insurance An organization described in sections 501(c)(3) or 501(c)(4) may be exempt from tax only if no substantial part of its activities consists of providing commercial-type insurance. Amend tax return 2011 However, this rule does not apply to state-sponsored organizations described in sections 501(c)(26) or 501(c)(27), which are discussed in chapter 4, or to charitable risk pools, discussed next. Amend tax return 2011 Charitable Risk Pools A charitable risk pool is treated as organized and operated exclusively for charitable purposes if it: Is organized and operated only to pool insurable risks of its members (not including risks related to medical malpractice) and to provide information to its members about loss control and risk management, Consists only of members that are section 501(c)(3) organizations exempt from tax under section 501(a), Is organized under state law authorizing this type of risk pooling, Is exempt from state income tax (or will be after qualifying as a section 501(c)(3) organization), Has obtained at least $1,000,000 in startup capital from nonmember charitable organizations, Is controlled by a board of directors elected by its members, and Is organized under documents requiring that: Each member be a section 501(c)(3) organization exempt from tax under section 501(a), Each member that receives a final determination that it no longer qualifies under section 501(c)(3) notify the pool immediately, and Each insurance policy issued by the pool provide that it will not cover events occurring after a final determination described in (b). Amend tax return 2011 Other Section 501(c)(3) Organizations In addition to the information required for all organizations, as described earlier, you should include any other information described in this section. Amend tax return 2011 Charitable Organizations If your organization is applying for recognition of exemption as a charitable organization, it must show that it is organized and operated for purposes that are beneficial to the public interest. Amend tax return 2011 Some examples of this type of organization are those organized for: Relief of the poor, the distressed, or the underprivileged, Advancement of religion, Advancement of education or science, Erection or maintenance of public buildings, monuments, or works, Lessening the burdens of government, Lessening of neighborhood tensions, Elimination of prejudice and discrimination, Defense of human and civil rights secured by law, and Combating community deterioration and juvenile delinquency. Amend tax return 2011 The rest of this section contains a description of the information to be provided by certain specific organizations. Amend tax return 2011 This information is in addition to the required inclusions described in chapter 1, and other statements requested on Form 1023. Amend tax return 2011 Each of the following organizations must submit the information described. Amend tax return 2011 Charitable organization supporting education. Amend tax return 2011   Submit information showing how your organization supports education — for example, contributes to an existing educational institution, endows a professorial chair, contributes toward paying teachers' salaries, or contributes to an educational institution to enable it to carry on research. Amend tax return 2011 Scholarships. Amend tax return 2011   If the organization awards or plans to award scholarships, complete Schedule H of Form 1023. Amend tax return 2011 Also, submit the following: Criteria used for selecting recipients, including the rules of eligibility. Amend tax return 2011 How and by whom the recipients are or will be selected. Amend tax return 2011 If awards are or will be made directly to individuals, whether information is required assuring that the student remains in school. Amend tax return 2011 If awards are or will be made to recipients of a particular class, for example, children of employees of a particular employer— Whether any preference is or will be accorded an applicant by reason of the parent's position, length of employment, or salary, Whether as a condition of the award the recipient must upon graduation accept employment with the company, and Whether the award will be continued even if the parent's employment ends. Amend tax return 2011 A copy of the scholarship application form and any brochures or literature describing the scholarship program. Amend tax return 2011 Hospital. Amend tax return 2011   If you are organized to operate a charitable hospital, complete and attach Section I of Schedule C, Form 1023. Amend tax return 2011   If your hospital was transferred to you from proprietary ownership, complete and attach Schedule G of Form 1023. Amend tax return 2011 You must attach a list showing: The names of the active and courtesy staff members of the proprietary hospital, as well as the names of your medical staff members after the transfer to nonprofit ownership, and The names of any doctors who continued to lease office space in the hospital after its transfer to nonprofit ownership and the amount of rent paid. Amend tax return 2011 Submit also an appraisal showing the fair rental value of the rented space. Amend tax return 2011 Clinic. Amend tax return 2011   If you are organized to operate a clinic, attach a statement including: A description of the facilities and services, To whom the services are offered, such as the public at large or a specific group, How charges are determined, such as on a profit basis, to recover costs, or at less than cost, By whom administered and controlled, Whether any of the professional staff (that is, those who perform or will perform the clinical services) also serve or will serve in an administrative capacity, and How compensation paid the professional staff is or will be determined. Amend tax return 2011 Home for the aged. Amend tax return 2011   If you are organized to operate a home for the aged, complete and attach Schedule F of Form 1023 and required attachments. Amend tax return 2011 Community nursing bureau. Amend tax return 2011   If you provide a nursing register or community nursing bureau, provide information showing that your organization will be operated as a community project and will receive its primary support from public contributions to maintain a nonprofit register of qualified nursing personnel, including graduate nurses, unregistered nursing school graduates, licensed attendants and practical nurses for the benefit of hospitals, health agencies, doctors, and individuals. Amend tax return 2011 Organization providing loans. Amend tax return 2011   If you make, or will make, loans for charitable and educational purposes, submit the following information. Amend tax return 2011 An explanation of the circumstances under which such loans are, or will be, made. Amend tax return 2011 Criteria for selection, including the rules of eligibility. Amend tax return 2011 How and by whom the recipients are or will be selected. Amend tax return 2011 Manner of repayment of the loan. Amend tax return 2011 Security required, if any. Amend tax return 2011 Interest charged, if any, and when payable. Amend tax return 2011 Copies in duplicate of the loan application and any brochures or literature describing the loan program. Amend tax return 2011 Public-interest law firms. Amend tax return 2011   If your organization was formed to litigate in the public interest (as opposed to providing legal services to the poor), such as in the area of protection of the environment, you should submit the following information. Amend tax return 2011 How the litigation can reasonably be said to be representative of a broad public interest rather than a private one. Amend tax return 2011 Whether the organization will accept fees for its services. Amend tax return 2011 A description of the cases litigated or to be litigated and how they benefit the public generally. Amend tax return 2011 Whether the policies and program of the organization are the responsibility of a board or committee representative of the public interest, which is neither controlled by employees or persons who litigate on behalf of the organization nor by any organization that is not itself an organization described in this chapter. Amend tax return 2011 Whether the organization is operated, through sharing of office space or otherwise, in a way to create identification or confusion with a particular private law firm. Amend tax return 2011 Whether there is an arrangement to provide, directly or indirectly, a deduction for the cost of litigation that is for the private benefit of the donor. Amend tax return 2011 Acceptance of attorneys' fees. Amend tax return 2011   A nonprofit public-interest law firm can accept attorneys' fees in public-interest cases if the fees are paid directly by its clients and the fees are not more than the actual costs incurred in the case. Amend tax return 2011 Upon undertaking a representation, the organization cannot withdraw from the case because the litigant is unable to pay the fee. Amend tax return 2011   Firms can accept fees awarded or approved by a court or an administrative agency and paid by an opposing party if the firms do not use the likelihood or probability of fee awards as a consideration in the selection of cases. Amend tax return 2011 All fee awards must be paid to the organization and not to its individual staff attorneys. Amend tax return 2011 Instead, a public-interest law firm can reasonably compensate its staff attorneys, but only on a straight salary basis. Amend tax return 2011 Private attorneys, whose services are retained by the firm to assist it in particular cases, can be compensated by the firm, but only on a fixed fee or salary basis. Amend tax return 2011   The total amount of all attorneys' fees (court awarded and those received from clients) must not be more than 50% of the total cost of operations of the organization's legal functions, calculated over a 5-year period. Amend tax return 2011   If, in order to carry out its program, an organization violates applicable canons of ethics, disrupts the judicial system, or engages in any illegal action, the organization will jeopardize its exemption. Amend tax return 2011 Religious Organizations To determine whether an organization meets the religious purposes test of section 501(c)(3), the IRS maintains two basic guidelines. Amend tax return 2011 That the particular religious beliefs of the organization are truly and sincerely held. Amend tax return 2011 That the practices and rituals associated with the organization's religious belief or creed are not illegal or contrary to clearly defined public policy. Amend tax return 2011 Therefore, your group (or organization) may not qualify for treatment as an exempt religious organization for tax purposes if its actions, as contrasted with its beliefs, are contrary to well established and clearly defined public policy. Amend tax return 2011 If there is a clear showing that the beliefs (or doctrines) are sincerely held by those professing them, the IRS will not question the religious nature of those beliefs. Amend tax return 2011 Churches. Amend tax return 2011   Although a church, its integrated auxiliaries, or a convention or association of churches is not required to file Form 1023 to be exempt from federal income tax or to receive tax deductible contributions, the organization may find it advantageous to obtain recognition of exemption. Amend tax return 2011 In this event, you should submit information showing that your organization is a church, synagogue, association or convention of churches, religious order, or religious organization that is an integral part of a church, and that it is engaged in carrying out the function of a church. Amend tax return 2011   In determining whether an admittedly religious organization is also a church, the IRS does not accept every assertion that the organization is a church. Amend tax return 2011 Because beliefs and practices vary so widely, there is no single definition of the word church for tax purposes. Amend tax return 2011 The IRS considers the facts and circumstances of each organization applying for church status. Amend tax return 2011 Convention or association of churches. Amend tax return 2011   Any organization that is otherwise a convention or association of churches will not fail to qualify as a church merely because the membership of the organization includes individuals as well as churches or because the individuals have voting rights in the organization. Amend tax return 2011 Integrated auxiliaries. Amend tax return 2011   An organization is an integrated auxiliary of a church if all the following are true. Amend tax return 2011 The organization is described both in sections 501(c)(3) and 509(a)(1), 509(a)(2), or 509(a)(3). Amend tax return 2011 It is affiliated with a church or a convention or association of churches. Amend tax return 2011 It is internally supported. Amend tax return 2011 An organization is internally supported unless both of the following are true. Amend tax return 2011 It offers admissions, goods, services, or facilities for sale, other than on an incidental basis, to the general public (except goods, services, or facilities sold at a nominal charge or for a small part of the cost). Amend tax return 2011 It normally gets more than 50% of its support from a combination of governmental sources, public solicitation of contributions, and receipts from the sale of admissions, goods, performance of services, or furnishing of facilities in activities that are not unrelated trades or businesses. Amend tax return 2011 Special rule. Amend tax return 2011   Men's and women's organizations, seminaries, mission societies, and youth groups that satisfy (1) and (2) shown earlier are integrated auxiliaries of a church even if they are not internally supported. Amend tax return 2011   In order for an organization (including a church and religious organization) to qualify for tax exemption, no part of its net earnings can inure to any individual. Amend tax return 2011   Although an individual is entitled to a charitable deduction for contributions to a church, the assignment or similar transfer of compensation for personal services to a church generally does not relieve a taxpayer of federal income tax liability on the compensation, regardless of the motivation behind the transfer. Amend tax return 2011 Scientific Organizations You must show that your organization's research will be carried on in the public interest. Amend tax return 2011 Scientific research will be considered to be in the public interest if the results of the research (including any patents, copyrights, processes, or formulas) are made available to the public on a nondiscriminatory basis; if the research is performed for the United States or a state, county, or municipal government; or if the research is carried on for one of the following purposes. Amend tax return 2011 Aiding in the scientific education of college or university students. Amend tax return 2011 Obtaining scientific information that is published in a treatise, thesis, trade publication, or in any other form th
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Amend tax return 2011 7. Amend tax return 2011   Ship Passenger Tax Table of Contents A tax of $3 per passenger is imposed on certain ship voyages, as explained later under Taxable situations. Amend tax return 2011 The tax is imposed only once for each passenger, either at the time of first embarkation or disembarkation in the United States. Amend tax return 2011 The person providing the voyage (the operator of the vessel) is liable for the tax. Amend tax return 2011 Voyage. Amend tax return 2011   A voyage is the vessel's journey that includes the outward and homeward trips or passages. Amend tax return 2011 The voyage starts when the vessel begins to load passengers and continues until the vessel has completed at least one outward and one homeward passage. Amend tax return 2011 The tax may be imposed even if a passenger does not make both an outward and a homeward passage as long as the voyage begins or ends in the United States. Amend tax return 2011 Passenger. Amend tax return 2011   A passenger is an individual carried on the vessel other than the Master or a crew member or other individual engaged in the business of the vessel or its owners. Amend tax return 2011 Example 1. Amend tax return 2011 John Smith works as a guest lecturer. Amend tax return 2011 The cruise line hired him for the benefit of the passengers. Amend tax return 2011 Therefore, he is engaged in the business of the vessel and is not a passenger. Amend tax return 2011 Example 2. Amend tax return 2011 Marian Green is a travel agent. Amend tax return 2011 She is taking the cruise as a promotional trip to determine if she wants to offer it to her clients. Amend tax return 2011 She is a passenger. Amend tax return 2011 Taxable situations. Amend tax return 2011   There are two taxable situations. Amend tax return 2011 The first situation involves voyages on commercial passenger vessels extending over one or more nights. Amend tax return 2011 A voyage extends over one or more nights if it extends for more than 24 hours. Amend tax return 2011 A passenger vessel is any vessel with stateroom or berth accommodations for more than 16 passengers. Amend tax return 2011   The second situation involves voyages on a commercial vessel transporting passengers engaged in gambling on the vessel beyond the territorial waters of the United States. Amend tax return 2011 Territorial waters of the United States are those waters within the international boundary line between the United States and any contiguous foreign country or within 3 nautical miles (3. Amend tax return 2011 45 statute miles) from low tide on the coastline. Amend tax return 2011 If passengers participate as players in any policy game or other lottery, or any other game of chance for money or other thing of value that the owner or operator of the vessel (or their employee, agent, or franchisee) conducts, sponsors, or operates, the voyage is subject to the ship passenger tax. Amend tax return 2011 The tax applies regardless of the duration of the voyage. Amend tax return 2011 A casual, friendly game of chance with other passengers that is not conducted, sponsored, or operated by the owner or operator is not gambling for determining if the voyage is subject to the ship passenger tax. Amend tax return 2011 Exemptions. Amend tax return 2011   The tax does not apply when a vessel is on a voyage of less than 12 hours between 2 points in the United States or if a vessel is owned or operated by a state or local government. Amend tax return 2011 Prev  Up  Next   Home   More Online Publications